THE TAXPAYER BAILOUT TAB GROWS
With its exorbitant labor costs (80 percent compared to FedEx’s 32 percent), massive pension obligations and diminishing market, the agency is dying a slow death … or at least it would be if U.S. taxpayers weren’t being forced to bail it out to the tune of billions of dollars.
During the most recent fiscal year (which ended on September 30), the Post Office lost a whopping $15.9 billion – $11.1 billion of which it says is due to a “pre-funding” retirement benefit obligation.
Whatever the reason … this is insanity. The Post Office is bleeding taxpayers dry to the tune of billions of dollars in bailouts … and will continue to do so until leaders in Congress acknowledge that these costs are unsustainable and (at long last) decide to cut the agency loose.
“The federal government should immediately divest itself of this money losing operation,” we wrote last year. “Clearly there is a market for the service it provides (albeit a diminishing one), but once again government is performing a non-core service … and performing it inefficiently.”
Astoundingly, rather than privatizing this money-losing operation, government is permitting the Postal Service to jack its prices on the very consumers who are bailing it out. Starting on January 27, a first class stamp will go from 46 to 47 cents while postcards will go from 32 to 33 cents. Also mail to all international locations will increase to $1.10 – up from 85 cents to Canada and Mexico and $1.05 to all other countries.
That may be chump change … but the soaring bailout tab sure isn’t.
It’s almost enough to make somebody go … postal?
America’s fiscal challenge is enormous … and looking increasingly insurmountable by the day … but common sense solutions like privatizing its money-losing, non-core functions (i.e. the Postal Service) show that there are steps we could take right now to start moving us in the direction of fiscal sanity.